Barclays reports 12 per cent increase in profits

07 August 2003

Barclays Bank has announced a 12 per cent rise in its pre-tax profits during the first half of 2003.

The bank's interim report, published today, showed that profits before tax in the six months to the end of June 2003 increased to £1.96 billion compared to £1.75 billion in the same period a year ago.

The bank reported that its operating income increased 5 per cent to £5.99 billion during the six-month period. At the same time the company cut its bad debt provision by 9 per cent to £652 million.

Barclays' profits and revenues were boosted by the boom in consumer lending from loans and credit cards. Revenues from general insurance increased 21 per cent, whilst consumer finance was up 14 per cent and mortgages increased 12 per cent.

Barclaycard increased its operating profit by 22 per cent to £381 million over the six-month period with strong business volumes driving income growth of 17 per cent to £878 million compared to £751 million in 2002. Average UK extended credit balances grew 16 per cent to £7.2 billion in 2003 compared to £6.2 billion in the same period a year ago.

The bank claimed that the business environment in 2002 was tough for all financial institutions with poor global demand and fall stock markets. However, the clearing of the uncertainty around the conflict in Iraq and fears of a double dip recession in the US abating have improved the outlook for the business.

Despite the international uncertainties the bank's UK market has remained relatively robust. Barclays believed that its UK market would remain strong because of the high levels of consumer confidence and the historically low interest rates.

The bank claimed that whilst, overall the remainder of 2003 still holds uncertainties, the outlook was generally more stable than at the start of the year.

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